A Brief overview of the new ETH POW Token which will be created by the fork of Ethereum
Who?
- Chandler Guo, and other developers and miners of Ethereum and Bitcoin.
What? ETH POW Token
- This new token will be created by the fork of the existing ethereum blockchain. This fork is the result of a disagreement within the ethereum community over the planned change to proof of stake. A change from the current proof of work consensus mechanism.
How?:
Part 1:
- Ethereum is open source, so the code is publically available, and people who specialize in blockchain development can fork the ethereum chain and continue to operate an ethereum blockchain clone.
Part 2: ETH POW airdrop
- A digital picture of wallet ETH balances will be created on Snap Shot Day, and these wallet balances will be used to determine which wallets get the air drops.
According to Cointelegraph interview with Guo:
- ETH wallet or the crypto exchange holding the ETH wallet must support the new fork.
- Users with ETH on exchanges supporting the fork should get the token without doing anything.
- However, token holders of ETH on layer-2 applications like Arbitrum or Optimism must move it to the Ethereum mainnet.
- All wrapped ETH on the mainnet must be unwrapped.
- All ETH used in liquidity pools must be drawn.
- ETH PoW will be dropped to anyone holding ETH when a snapshot is taken.
- Further information on Airdrops here
When: Snap Shot
- This is the time and date a ppicture is taken of all eligible ETH containing wallets.
- Paris execution layer upgrade at 2022-09-15 00:00 (UTC) This is expected to be the time of the snapshot.
When: Fork?
- Merge Day Ethereum will migrate to a PoS chain at approximately 12:30am UTC on September 15, 2022.
- The same day Ethereum merges it's current proof of work blockchain with the proof of stake blockchain.
- Further info on the Merge here
Important Times to remember: Snapshot and ETH Merge
- SnapShot: Paris execution layer upgrade at 2022-09-15 00:00 (UTC) This is expected to be the time of the snapshot.
- ETH Merge: Ethereum will migrate to a PoS chain at approximately 12:30am UTC on September 15, 2022.
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Good News and Bad News
Good News
- Some exchanges have announced support: Binance, FTX and Polonieux, so if you move your ETH there you should get air dropped the new token, and you should be able to sell it there.
- Addendum: Coinbase, KuCoin and Crypto.com have also announced support for this token and report you can sell the token there.
- Current Futures trading on the token have the price at 118$ per token.
- Ethereum Classic is a fork of Ethereum and it still survives, and has recreated the necessary infrastructuure to allow retail traders access to and active trading in this token.
- This creates an interesting scenario where there are three Ethereums; Ethereum POS, Ethereum POW and Ethereum Classic.
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Bad News
- Potential problems
- Ethereum Proof of work infrastructure will transition to the proof of stake chain, and no longer be available to this new proof of work token.
- This includes things like APIs, Infura, and other Ethereum infrastructure used by retail investors which will not be available for investors to move these new tokens around or have the wallet recognize them and display the.
- This means if you get airdropped in a non-exchange location, as in not on one of the exchanges who have agreed to support the token you may not know enough about crypto and computers to move your tokens.
- I know that seems nonsensical, but the Ethereum blockchain isn’t completely decentralized, and certain software constructs which are invisible to you only become visible when they want to block your wallets, like Infura did earlier this year when they blocked random Russians from accessing their Ethereum.
- So retail investors may run up against some walls outside these exchanges.
- Ethereum Oracle Chainlink will not support the POW token, so a vulnerability called RePlaying could plague this blockchain from the start, but the team forking the blockchain may have a solution. This may result in retail heavy losses and collapse of the chain.
- Some ethereum miners who are against the fork say that without the Ethereum infrastructure which goes with the POS chain, retail investors will find themselves in a boat with no paddles.
- Some think that sophisticated miners, developers and degens will take advantage of retail investors, taking their money and leaving them with worthless tokens.
- And infrastructure issues that retail investors don't understand will be exploited to milk retail investors of their capitol.
Summary
- There are many pros and cons.
- It's potentially free money
- It's being called a trap for retail investors, and I don't completely understand why, but then again, I am a retail investor!
- It seems that many cryptocurrency influencers, miners and devs are steering retail investors away from this token suggesting they will get burned, as in sustain losses.
- I think everyone who owns ethereum should decide if the price of the ETH POW token is worth researching the air drop and seeing if they can get some of this free money.
- ETH owners with tokens in eligible locations and forms should be air dropped an equivalent amount of this token.
- Only you should decide if this is worth your time and effort to take advantage of the free money or simply stay away from this if you think it's a scam.
- All the exchanges supporting the Token issued statements. Poloniex issued a rather chilling warning:
As there are still uncertainties in the hard fork of ETH, trading or investing in "potential forked" tokens bears high risks. This potential fork may not last due to insufficient hashrate or a possible lack of support from developers or community members, which will cause the tokens to lose all value or be delisted from Poloniex. Poloniex does not guarantee the value of any "potential forked" tokens, please be prudent before making any decisions.
- I don’t know if they are trying to scare us, warn us or both. But they made their point.
Remember Defi is risky, crypto is risky, you can lose all you put in, but the rewards can be great. Educate yourself.
References:
https://beincrypto.com/eth-pow-who-is-building-why-how-to-profit-from-token-airdrops/
https://beincrypto.com/eth-pow-who-is-building-why-how-to-profit-from-token-airdrops/
https://www.coindesk.com/tech/2022/08/24/ethereum-proof-of-work-forks-gift-or-grift/
https://support.poloniex.com/hc/en-us/articles/8016650426775
https://cointelegraph.com/news/eth-whales-move-holdings-onto-exchanges-before-merge
https://coinmarketcap.com/currencies/ethereum-pow/
https://beincrypto.com/learn/airdrops/
https://chaindebrief.com/6-exchanges-to-sell-eth-pow-tokens/
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